Food Chains Entering Electronics Market Aim to Mask Rising Food Prices

The Israeli electronics market is undergoing significant shifts, marked by changes in distribution, parallel imports, and supply chain challenges. Niufan, a major electronics importer celebrating 40 years, recently secured the exclusive franchise for Samsung electronics (excluding mobile phones) starting in 2025. This move, which previously belonged to Miniline for decades, has shaken the industry. Samsung has also granted Electra Consumer Products direct import rights, bypassing Niufan.

Miniline has responded by initiating parallel imports of Samsung products and acquiring the franchise for Air screens, previously handled by Niufan. "The recent moves are excellent for us," stated Zvika Gyor, Niufan's founder and chairman, noting that Samsung adds hundreds of millions of shekels annually to their revenue. He emphasized that securing nearly 70% of the top brand in Israel strengthens their purchasing power with retailers.

Meanwhile, major food chains like Osher Ad and Victory are expanding into electronics sales, allocating significant floor space to attract customers with lower prices, often on parallel-imported goods. "The entry of food chains into the electronics sector is intended to mask the rise in food prices," explained Yaron Tzadia, Niufan's CEO. He downplayed the impact, stating these chains represent only about 5% of the NIS 6 billion annual electronics market and their purchase volumes are small. Tzadia also noted that while this trend is global, Israeli media gives it undue attention, shifting focus from rising food costs to perceived drops in electronics prices.

The "What's Good for Europe" reform has broadened parallel imports and product variety for importers like Niufan, allowing faster market entry by removing redundant testing requirements. While not a dramatic game-changer, it contributes to competition and price reduction over time. Despite global chip shortages and rising shipping costs, the highly competitive Israeli market, with its numerous importers, retailers, and online platforms, keeps intermediary margins in check. The online sales share in Israel remains stagnant at around 15%, significantly lower than in Europe or the US, as Israeli consumers prefer to see and negotiate products in physical stores.

Niufan is also exploring future ventures into robotics, including industrial cleaning robots and potential applications in warehouse security and elder care, anticipating a future where AI robots are common in homes. They are also expanding into energy management systems for large buildings and real estate projects, integrating smart home electronics for new developments.